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Friday, May 25, 2007 Let's Fix This Problem Once and For All - Randall Krause - Executive Director, Small Webcasters Community Initiative

For the past several weeks, SoundExchange has been been engaging in private negotiations with Webcasters for royalty rates and terms in lieu of those set by the Copyright Royalty Board on March 2, 2007. However, an extension of the Small Webcaster Settlement Act is also purportedly underway between SoundExchange and a select group of small Webcasters, as represented by attorney David Oxenford, at the behest of two key members of the House committee on Courts, the Internet, and Intellectual Property.

However, these negotiated settlements with SoundExchange may well have unintended legal ramifications. In particular, "blanket" license agreements issued by SoundExchange supposedly only cover the creative works of SoundExchange members. They would not completely relieve small Webcasters of their royalty obligations within the United States for the digital performance right in sound recordings pursuant to the Copyright Act.

Simply put, SoundExchange is only a designated collecting body for statutory licensees. Neither SoundExchange nor Royalty Logic can claim to represent the vast majority of recording artists and record labels -- that is, in the same fashion as ASCAP, BMI, SESAC in the case of musical works.

As a result, there is no guarantee that any license agreements dealt by SoundExchange will adequately remunerate non-SoundExchange recording artists and record labels (including members of RoyaltyLogic) as stipulated by Section 114 and Section 112 of the Copyright Act.

While SoundExchange itself is certainly welcome to extend the rates and terms of the Small Webcaster Settlement Act indefinitely, any such custom license agreements cannot faithfully perform the intended function of the original statutory license unless those same rates and terms are again codified into federal law and published within the Federal Register, (In fact, this was the exact reason that both SoundExchange and the Voice of Webcasters originally persuaded Congress to pass the Small Webcaster Amendments Act of 2002, rather than resorting to separate back-room deals).

The official Small Webcaster Settlement Act expired December 31, 2005. The fact remains that Congress was responsible for the passage of that originally legislation, and they should ultimately be held accountable for maintaining it. We cannot authorize SoundExchange to meddle with the intellectual property rights of thousands of record labels nationwide by drafting whimsical license agreements without appropriate government oversight. That is not only an injustice to small Webcasters, but it is a slap in the face of thousands of unsigned artists nationwide who must now trust SoundExchange exclusively to look out for their "best interests."

So long as the Copyright Royalty Board determination has been published in the Federal Register (as it was on May 1, 2007), then the Small Webcaster Settlement Act is officially annulled and loses all legal force and effect as a "compulsory license." Let's fix the problem once and for all by continuing to pressure Congress to pass the Internet Radio Equality Act, instead of resorting to dubious patchwork solutions.

Randall Krause is the Executive Director of the Small Webcaster Community Initiative
posted by savenetradio  # 11:50 AM

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